Supreme Court of Canada Releases the Viagra Decision

Nov 8, 2012

In a unanimous decision released November 8, 2012, the Supreme Court of Canada has reversed the judgments of the Federal Court and the Federal Court of Appeal and cleared the way for an affordable generic version of Pfizer’s Viagra to be sold in Canada by Teva Canada Ltd. Teva was represented by Osler’s David Aitken and Marcus Klee and Teva’s Vice President & General Counsel, Ildiko Mehes.

This is the first time since 1981 that the Supreme Court has comprehensively addressed the statutory requirement to fully and correctly disclose the invention in a patent. This disclosure requirement has previously been described by the Supreme Court as the heart of the patent bargain and the quid pro quo of the patent monopoly. The decision provides much needed guidance on this central tenet of patent law.

Teva’s success before the Supreme Court of Canada will promote transparency in the patent system and dissuade patent owners from “gaming” the patent system by securing a monopoly while simultaneously maintaining the invention as a trade secret.

Background Facts

Sildenafil, the active ingredient in Viagra, was originally developed by Pfizer for use in treating angina and hypertension. Pfizer obtained a patent covering sildenafil and its use in treating angina and hypertension in 1998. When testing sildenafil on patients suffering from angina, Pfizer observed that some people experienced spontaneous erections. Pfizer carried out a small clinical study to test the effects of sildenafil on patients with erectile dysfunction (ED) and then applied to obtain a second patent covering the use of sildenafil in the treatment of ED.

Although sildenafil was the only compound that Pfizer had tested and observed to induce erections, Pfizer chose to draft the patent to cover many other compounds that it had neither made nor tested. Pfizer artfully worded the patent to conceal the fact that sildenafil was the test compound.

Judicial History

In 2007, Teva filed a submission for regulatory approval to sell its generic version of Viagra. Pfizer responded by bringing a proceeding in the Federal Court for order prohibiting the Minister of Health from granting approval to Teva until expiry of the patent. Teva resisted Pfizer’s application on the basis that the patent was invalid on numerous grounds, including failure to satisfy the disclosure requirements set out in s. 27(3) of the Patent Act.

Pfizer’s application was granted and prohibition was ordered by the Federal Court and upheld by the Federal Court of Appeal.

The Supreme Court Decision

The Supreme Court agreed with Teva’s submission that in failing to disclose the identity of sildenafil as the compound, the patent failed to fully and correctly disclose the invention and imposed on the reader “a minor research project” to identify the true invention.

Justice Le Bel, writing for the Court, stated that “the public’s right to proper disclosure was denied in this case” and that the patent obscured the true invention. He concluded “Pfizer gained a benefit from the Act — exclusive monopoly rights — while withholding disclosure in spite of its disclosure obligations under the Act. As a matter of policy and sound statutory interpretation, patentees cannot be allowed to ‘game’ the system in this way.”

Implications of the Decision

The Supreme Court’s decision paves the way for the introduction of lower cost generic Viagra into the Canadian market. Perhaps more importantly, the decision reaffirms and clarifies the disclosure obligations required of a patentee as the quid pro quo for the state granted patent monopoly. The Supreme Court has provided a clear signal that the patent system is founded on disclosure as the engine of innovation as an essential element of the patent bargain. Sophisticated companies who ‘game’ the patent system do so at their peril. This decision re-establishes a balance between the interest of patent owners and the interest of the Canadian public.